Power from the Tri-Dam Project’s Donnell’s Reservoir will be sold to the Silicon Valley Power Company for 10 years starting Jan. 1, 2014.

Photo contributed/

The power hungry Silicon Valley could be helping Manteca, Lathrop, and Ripon electrical users eventually obtain lower rates.

The Santa Clara based Silicon Valley Power Company has inked a 10-year deal to buy hydro power from the Tri-Dam Project that is owned 50-50 by the San Joaquin Irrigation District and Oakdale Irrigation District.

That contract is for a higher amount per kilowatt hour than the current deal with an energy firm that expires on Dec. 31. That’s because the Tri-Dam Power is renewable allowing big corporate power users in the Silicon Valley to take advantage of the carbon credit market to offset penalties placed on them by the state for using electricity generated using fossil fuels.

The deal means SSJID will be getting even bigger receipts from Tri-Dam to help deliver power to Manteca, Ripon, and Escalon users at 15 percent below PG&E levels if they are successful at gaining the OK to enter the retail electricity market.

The SSJID would secure a long-term power contract to supply customers that is at a significantly lower rate than the renewable energy that they are selling to the Bay Area utility thanks to the state-mandated carbon credits program.

California’s Cap-and-Trade Program has created a huge demand for renewable energy credits to offset penalties assessed for fossil fuel created electricity that is a major target of efforts to reduce greenhouse emissions.

Since many large high tech firms in the Silicon Valley have large computer “server farms” they have a high level of electricity consumption.

If only a third of the Silicon Valley Power Company’s electricity they sell comes from green or renewable sources that exposes the firms consuming large amounts of power to be responsible for large penalties unless they offset the fossil fuel power with more renewable.

SSJID General Manager Jeff Shields said Tri-Dam’s record of being a reliable source of wholesale power plus the fact the electricity generated has a higher value due to the carbon credits made the deal attractive to Silicon Valley Power Company.

At the same time it sweetens the pot for SSJID that has amassed well over $50 million in reserves after their 50-year contract with PG&E to buy Tri-Dam power expired. The SSJID has been able to spend millions on capital improvements and implementing state-of-the-art water conservation systems thanks to Tri-Dam receipts.

Prior to the new deal, the SSJID already was in a position to lower rates in Manteca, Ripon, and Escalon 15 percent across the board if the San Joaquin County Local Agency Formation Commission grants them the right to do so.

The application is still pending before LAFCo after nearly five years.

The Silicon Valley Power Company has rates significantly below PG&E. That’s because the power company is a municipal utility operated by the City of Santa Clara.

One of the investments SSJID made along with OID through their Tri-Dam partnership was adding 10 more megawatts of power generating capacity. The project on the Stanislaus River watershed is now capable of generating 130 megawatts of power.